Start Your Retirement Happily – Be Financially Stable
“Retirement” as a concept is relatively new – barely a 100 years old. In fact, articles such as A Brief History of Retirement actually chronicle how the entire concept of retirement came about. Today, however, things are completely different. Retirement is taken for granted and you need to plan on how to start your retirement.
What does “Retirement” mean to you?
Before you start planning for retirement, you need to define what the term means to you. Here are a few questions you should ask yourself:
- Do you plan to stop working completely and live off your savings and investments? If this is the case, then you need to ensure that you have enough and more saved up and your investment portfolio needs to be geared up for retirement.
- Do you plan to continue working and not really “retire”? You would still need to save in case of eventualities. As we grow older, health problems become commonplace. Health insurance and savings for medical and other emergencies still need to be in place.
- Do you plan to start your own business or work part-time somewhere? This is risk you are taking at the end of your career. You need to ensure that you have a fall back plan in place in case your venture fails.
- Do you plan to live in the same place or will you move once you retire? Your cost of living will depend on this. If you are currently living in a huge house, will you still need it once you retire? Maintenance costs can leech away your savings.
At the end of the day, whatever you decide, as you grow older, savings become a necessity rather than a good-to-have option.
Assess your situation
Before you can make a plan for retirement, you need to assess your situation. So, here are the steps you need to take:
- Calculate how much you will need to live the same lifestyle.
This means figuring out how much you spend per month. And then factor in inflation – the cost of living keeps going up, after all.
You can use a retirement calculator to give you a ballpark figure of how much you need to start your retirement.
- Check your savings.
You need to know how much you have already saved towards for your retirement. This means looking at all options for retirement savings. You need to know whether you have done enough so that you can retire peacefully.
Create a plan to Start Your Retirement
Once you have assessed your situation, you will know where you stand with regard to your retirement. This is when you can create a plan to start your retirement confidently.
- Start Saving.
It’s never too late or too early to start saving. If you haven’t started yet, start now. Make it a habit to save. It may be cumbersome in the beginning, but after a while it gets to be a habit. You will feel good about it too when you see your savings grow.
- Create a personal spending plan with retirement in mind.
This basically means create and budget and stick to it. Having a budget is so important to financial stability in the present as well as the future. You can then free up more money to invest in your retirement.
- Check out all retirement plans
Explore all retirement plans and start contributing to them. Try and max out as many retirement plans as you can. These are savings which will help you when you retire.
- Find out about your Social Security benefits
Ensure that you have all the work credits you need to qualify for Social Securitywhen you retire.
- Review your health insurance options
Explore all options when it comes to health insurance when you start your retirement. Medical costs are one of the biggest expenses after retirement.
- Pay off all your debts
Try to start your retirement debt free. This means that none of the money you have put aside for retirement will be wasted.
Today, retirement can last for 20 years or more. That is a long time and planning for it only makes sense.